If you’re looking for information to help you ace the FINRA Series 7 Exam you’ve come to the right place!
We’ve put together some seriously helpful information to get you started and answer questions you have such as:
Where can I learn more?
If you’re ready to dig in you can follow the links above to their respective articles. If you’re still unsure of the details of the Series 7 exam check out the information below. We’ll explain it all…
What Is the Series 7 Exam?
Formally known as the General Securities Representative Examination, the Series 7 exam is a batch of tests mandatory for anyone wishing to perform legal transactions of the various types of securities. Its necessity arose from the need to safeguard the investment sector of the general populace by having representatives competent enough to do so.
Administered by the Financial Industrial Regulatory Authority (FINRA), it’s a necessary stage that must be taken, and passed, by anyone (directors, partners, officers, managers, salespersons etc) engaged as an associate in a firm to register with FINRA.
Those wishing to take the Series 7 exam have to part with an enrollment fee of about USD $250. This six hour long exam comes in multiple choices format and covers a range of topics from stocks and options to the evaluation of a customer’s needs and objectives.
Updated for current content, the exam is administered in two three hour sessions, each containing one hundred and twenty five questions for a total of two hundred and fifty questions; there is a preliminary stage with ten pre-test questions that does not count towards the final score. A test score of 70% or above is recognized as a passing score and the exam may be taken on any weekday at any FINRA approved examination centre within the US or worldwide.
The Series 7 exam tests applicants on various sectors of the securities market business by ensuring they are qualified to solicit customers or potential clients, and acquire, buy and/or sell all forms of products such as: options, corporate securities, municipal securities, investment options, etc. The exam covers the critical functions and tasks of a registered representative (otherwise known as a stock broker).
Since the primary goal of the exam is to ensure the safety of the public’s investment sector, well over half the questions bear special emphasis on customers – covering topics on how to seek business through customers for the broker-dealer, customer evaluation, provisioning of client information on investments and the maintenance of customer portfolio in all its aspects.
There are no prerequisites required to take it; though consensus has it that due to the nature of qualifications required to take the test, bearers of education in economics have a better than average chance of passing. Though FINRA provides no certificate or any form of license to indicate that one has passed the securities exam, only sponsored individuals of self-regulatory bodies such as exchanges or of firms affiliated to FINRA may take the test.
Some leeway is made for individuals sponsored by state regulators in rare situations. Some allowance is further made for people associated with the Financial Services Authority (FSA) in the UK to take a limited form of the exam, as are individuals registered with the Canadian securities regulatory organizations.
A conundrum seemingly arises when we hear that to take the exam one has to be sponsored by a recognized firm while we would need to pass the exam to get the license in-order to be employed by them. This can be overcome by seeking attachment as a student at any financial services firm or self-regulatory organization. Another route towards successfully passing the Series 7 Exam is to try to be hired as a sales-rep by using the easier to get Series 6 to get employed. This would mean starting low but has the advantage of exposing one to the peculiarities of the market while cutting short study time as you work to further your career.
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